AS TO THE ADMISSIBILITY OF
Application no. 61390/00
by Ragnar VALIN
The European Court of Human Rights (Second Section),
6 September 2005 as a Chamber composed of:
Mr J.-P. Costa, President,
Mr I. Cabral Barreto,
Mr V. Butkevych,
Mrs A. Mularoni,
Mrs E. Fura-Sandström,
Ms D. Jočienė,
Mr D. Popović, judges,
and Mrs S. Dollé, Section Registrar,
Having regard to the above application lodged on 20 June 2000,
Having regard to the partial decision of 4 May 2004,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
The applicant, Mr Ragnar Valin, is a Swedish national, who was born in 1949 and lives in Leksand. He was represented before the Court by Mr J. Thörnhammar, a lawyer practising in Stockholm. The respondent Government were represented by Ms E. Jagander, Ministry for Foreign Affairs.
The facts of the case, as submitted by the parties, may be summarised as follows.
On 3 May 1993 the Tax Authority (skattemyndigheten) of the County of Dalarna decided to carry out a tax audit of KB Forward, a construction company owned by the applicant and his two brothers. The applicant was informed thereof the following day and on 13 May the Tax Authority visited the company’s office and collected receipts and other documents relating to the company’s bookkeeping. As a result of the audit, which ended on 18 October 1993, value-added tax (mervärdeskatt) for the period November 1990 – June 1993 was levied on the company. The tax totalled more than 7 million Swedish kronor (SEK) including tax surcharges. The amount was fixed following a discretionary assessment as the company’s accounts were considered so deficient – in breach of the relevant provisions of the Accountancy Act (Bokföringslagen, 1976:125) – that they could not form the basis of an assessment. The Tax Authority further stated that the deficiencies had severely impeded the audit.
Unable to pay the above amount, the company was declared bankrupt on 16 December 1993, at its own request. The bankruptcy administrator found no reason to suspect that any criminal offence had been committed.
However, following the completion of the tax audit, the Tax Authority, on 17 January 1994, reported the matter to the public prosecutor in Falun who, on 18 March 1994, decided to initiate a preliminary investigation.
Furthermore, on 8 April 1994 the Swedish State through the Tax Authority, lodged an application to the District Court (tingsrätten) of Leksand, requesting that the applicant and his brothers personally be ordered to pay the outstanding value-added tax and tax surcharges, amounting to SEK 7,261,944, including late payment fees. The Tax Authority relied on section 48 a of the Value-Added Tax Act (Mervärdeskattelagen, 1968:430), according to which such a payment liability could be imposed on a representative of a company if he or she, wilfully or through gross negligence, had failed to pay the relevant tax. This case was settled in April 1998 by an agreement between the parties that the applicant and his brothers pay the State SEK 400,000 of the tax arrears. The agreement was confirmed by the District Court in a judgment of 7 May 1998.
In the meantime, on 8 May 1996 the applicant had been interviewed by the police and formally notified of the suspicions against him, which concerned an aggravated bookkeeping offence and aggravated tax fraud. Evidence from certain witnesses was obtained by the police in August and November 1996 and in June 1998. The preliminary investigation was finalised on 2 July 1998, and the applicant was informed of the results on 10 July 1998. On 3 May 1999 the public prosecutor indicted the applicant for an aggravated bookkeeping offence (grovt bokföringsbrott) or, in the alternative, for having grossly impeded tax supervision (försvårande av skattekontroll, grovt brott).
On 17 May 1999 the District Court summoned the applicant to answer the charges. Following two extensions of the time-limit fixed therefor, the applicant contested the charges in submissions received by the court on 17 September 1999. Following the public prosecutor’s observations, the applicant was granted a further extension of the time-limit to reply. In submissions of 25 November 1999 the applicant moved for a dismissal of the criminal case on formal grounds.
Referring to the 1998 settlement between the State and him and his brothers, the applicant submitted that the matter was res judicata. Moreover, as the settlement concerned a tax debt which included tax surcharges, a conviction would involve a second criminal punishment, in breach of the principle of ne bis in idem. Finally, he claimed that the case should be dismissed as it had not been examined within a reasonable time.
By a decision of 25 January 2000, the District Court rejected the applicant’s objections. It stated that the 1998 settlement, which had been reached in a civil case and had regulated the economic liabilities of the applicant and his brothers in relation to the State, could not determine any criminal liability. It also considered that the length of the proceedings was not unreasonable. The court further rejected the applicant’s alternative request that the case be adjourned.
The applicant appealed and, by a decision of 31 January 2000, the District Court adjourned the case pending the outcome of the appeal.
On 6 April 2000 the Svea Court of Appeal (Svea hovrätt) upheld the District Court’s decision. It noted that the facts in the public prosecutor’s bill of indictment were different from those that had formed the basis of the applicant’s payment liability under section 48 a of the Value-Added Tax Act. Accordingly, there was no similarity between the two cases which could lead to the dismissal of the criminal case under Swedish law. Nor could the 1998 settlement imply that the applicant had been convicted of a crime within the meaning of Article 4 of Protocol No. 7 to the Convention. The appellate court further considered that Article 6 of the Convention did not imply that a criminal case should be dismissed because of an unreasonable delay in bringing an indictment; instead, such a delay could be taken into account on sentencing.
In accordance with the applicant’s request, the District Court cancelled a hearing scheduled for 9-10 May 2000.
On 18 May 2000 the Supreme Court (Högsta domstolen) refused the applicant leave to appeal against the Court of Appeal’s decision.
On 16 August 2000 the applicant applied to the Supreme Court for the matter to be re-opened, referring to the lodging of the present case. Consequently, the District Court, on 27 September 2000, decided to cancel a hearing scheduled for 13-14 November 2000. On 25 October 2000 the Supreme Court rejected the re-opening request.
By a decision of 23 November 2000, the District Court rejected the applicant’s motion for the continued adjournment of the case and scheduled a main hearing for 13-14 February 2001. This hearing was held as planned.
By a judgment of 28 March 2001, the District Court acquitted the applicant. In examining the impact of the length of the proceedings in the light of Article 6 of the Convention, the court first considered that the period at issue had started on 14 May 1993, when the Tax Authority had collected documentation at the company’s office, and accordingly concluded that the proceedings, at the time of its judgment, had lasted almost eight years. It noted that, for the period between 18 October 1993, when the tax audit had been finalised, and 8 May 1996, when the applicant had been heard by the public prosecutor, no particular measures had been taken. Thereafter, save for the hearing of certain witnesses during the autumn of 1996, no action which had brought the investigation forward had been taken until 3 May 1999, when the applicant was indicted. However, the following delay of almost two years before the District Court was mainly due to the applicant’s numerous requests for respites and the proceedings relating to his move for a dismissal of the case on formal grounds, and could therefore not be counted in his favour when assessing whether the proceedings had been too long. The court continued:
“Still, the total time of the proceedings before the police and the public prosecutor has been remarkably long and during the major part of that period no action has been taken in order to make the case ready for a decision whether to prosecute. No information has come to hand which shows that the lengthy proceedings, until the indictment was brought, have been due to the applicant. Even if – as is common these days – the lengthy proceedings could be imputed to a lack of resources of the police and prosecution authorities, it follows from the rather abundant case-law of the European Court of Human Rights ... that the fact that the courts are overburdened with work has not constituted an acceptable reason for delays in the proceedings. ... In the District Court’s view, a similar approach could be taken in regard to corresponding circumstances within the police and prosecuting authorities in our country.
The District Court finds, in conformity with what the public prosecutor also appears to have found, that the proceedings thus far have not been compatible with Article 6 [of the Convention] nor, as the Convention has the status of law in Sweden, with Swedish law.”
Considering that the breach of the right to a hearing within a reasonable time had been of a particularly serious nature given the lack of activity for very long and continuous periods, the District Court went on to examine what impact this conclusion had on the case. In the absence of domestic legal provisions or case-law to that effect, the court found that a criminal case could not be dismissed due to lengthy proceedings save for the situations where it fell under the statute of limitations.
In examining the bookkeeping offence with which the applicant had been charged, the District Court noted that 120 receipts covering a very large amount of money had not been entered into the company’s books and that, due to these deficiencies, the operation and results of the company had not been ascertainable. The investigation in the case did not show that the applicant, as the responsible representative of the company, had acted with intent or gross negligence. Nevertheless, having failed to make sure that the bookkeeping had been handled by sufficiently competent and experienced personnel, the applicant had been negligent, especially as he did not have the necessary competence in these matters himself, and he was thus guilty of a bookkeeping offence. Having regard to the large amount of money involved and the relatively long period during which the bookkeeping had been deficient, the District Court noted that the offence had been aggravated. Nevertheless, the court considered that the offence was not of an aggravated nature. In so doing, it took into account that the economic issues involved had been of a complex nature to the applicant, that an initially very successful project had failed due to a sudden and rapid weakening of the real-estate market, that the applicant had not acted with the aim of evading tax or obtaining personal benefits and that a very long period of time had passed since the offence had been committed.
As a consequence of its finding that the offence was not to be classified as aggravated, the court concluded that it was statute-barred. It referred to chapter 35, section 1 and section 4, subsection 3 of the Penal Code (Brottsbalken), which provided that a bookkeeping offence of the normal degree – for which the penalty was a term of imprisonment not exceeding two years – became statute-barred if the suspect had not been detained or notified of the charges against him within five years of the date when the person responsible for the bookkeeping (in this case the company in issue) had been declared bankrupt. However, under the same provisions, an aggravated bookkeeping offence became statute-barred only after a period of ten years.
In regard to the alternative charge of impeding tax supervision, the District Court found that the deficient bookkeeping had impeded the Tax Authority’s supervision of the company to such an extent that the applicant was criminally liable therefor. However, for the same reasons as those mentioned above in relation to the bookkeeping offence, the court considered that the offence was not of an aggravated nature and that, consequently, also this offence was statute-barred under the provisions of the Tax Offences Act (Skattebrottslagen, 1971:69) and the Penal Code.
No appeal was made against the District Court’s judgment, which consequently acquired legal force on 18 April 2001, at the expiry of the time-limit for appeals.
On 20 April 2001 the applicant submitted a claim for economic compensation to the Chancellor of Justice (Justitiekanslern), in which he maintained that the slow handling of his case constituted a wrongful act or omission, within the meaning of chapter 3, section 2 of the Tort Liability Act (Skadeståndslagen, 1972:207), and that, accordingly, the Swedish State was liable to pay him compensation. He referred to the District Court’s conclusion that the criminal charges against him had not been determined within a reasonable time, as required by Article 6 of the Convention, and asserted that the District Court’s judgment should be regarded as legally binding for the Chancellor of Justice, inter alia, as regards the court’s assessment that the starting point of the relevant proceedings had been 14 May 1993.
In written observations submitted to the Chancellor of Justice, the Prosecutor-General (Riksåklagaren) commented on the applicant’s claim. With reference to the Court’s practice, the Prosecutor-General noted, inter alia, that the relevant time-period begins when the authorities have taken some action which causes an individual’s situation to be significantly affected by the existence of suspicions against him. Applying the relevant principles to the facts, the Prosecutor-General stated that he was unable to share the District Court’s view that the criminal proceedings against the applicant should be held to have started already on 14 May 1993, i.e. at the time of the Tax Authority’s visit to the company’s office to collect documents relating to the company’s bookkeeping. In the Prosecutor-General’s submission, the material relied on by the applicant did not show that, as a consequence of the tax audit, a tax surcharge had been imposed on him personally, or that at that point he had been charged with a criminal offence within the meaning of the Convention in any other way. Furthermore, in the circumstances of the case, the decision taken by the public prosecutor to initiate the preliminary investigation should not be held to constitute the starting-point for the calculation of the relevant time-period. In this respect it was observed that a decision to initiate a preliminary investigation is not public, nor is it brought to the attention of the individual who conceivably could be affected by it. Moreover, in the applicant’s case no measures of a more intrusive nature (such as interviews with witnesses) had been taken during the period before the applicant was notified of the suspicions against him. Against this background, the Prosecutor-General considered that the relevant time-period should be held to have begun when the applicant was notified of the suspicions against him, i.e. on 8 May 1996, and to have ended on 18 April 2001 when the District Court’s judgment acquired legal force.
The Prosecutor-General further submitted that the preliminary investigation had concerned suspicions of crimes of a complicated nature, that it had been relatively extensive and that it had also concerned suspicions against other persons. Noting also that legal security required that the public prosecutor be given time to make certain legal assessments as the investigation progressed, as well as the fact that the length of the proceedings before the District Court to a large extent had been the result of the applicant’s conduct, the Prosecutor-General submitted that the State had not incurred any liability in tort on the basis that the criminal charges against the applicant had not been determined within a reasonable time.
By a decision of 30 October 2003, the Chancellor of Justice rejected the applicant’s claim. While stating that usually he had no reason to question the considerations of a court, he found, in the instant case, that there were grounds for reaching a different conclusion regarding the length of the proceedings than that adopted by the District Court. These grounds were mainly related to the question of when the relevant proceedings were supposed to have started. The Chancellor of Justice stated that he shared the Prosecutor-General’s assessment in this respect and thus considered the relevant period to have begun on 8 May 1996. Calculated on this basis the overall length of the proceedings amounted to almost five years.
Holding that the criteria established by the Court for the assessment under Article 6 of the Convention could be used also for the determination of whether the Swedish State had incurred tort liability under the Tort Liability Act, the Chancellor of Justice observed that the applicant’s case had been of a relatively complicated nature. The suspicions had included the commission of a bookkeeping offence and fraud regarding value-added tax, and the preliminary investigation had concerned several suspects and economic transactions in several legal entities. The record of business transactions had been of a special kind, as records were to be kept for each separate project. The investigations regarding the VAT rates, which were different for each project, had been time-consuming and had required a certain expertise. Against this background, and notwithstanding the applicant’s submission that most of the investigation had been concluded through the completion of the tax audit, the Chancellor of Justice found that a more extended period of proceedings than normal had been acceptable in the case.
With reference to the conduct of the authorities and the applicant, the Chancellor of Justice noted, inter alia, that a period of almost eight months had passed between the completion of the preliminary investigation and the decision of the prosecutor to proceed against the applicant. As no explanation had been provided for the length of this time-period, there had been a certain delay in the proceedings for which the prosecutor was responsible. After reviewing the proceedings before the District Court, however, the Chancellor of Justice held that the delays incurred at that stage of the proceedings had been caused mainly by the applicant and that there was no indication that the District Court or the prosecutor had contributed to these delays.
In conclusion, the Chancellor of Justice held that the duration of the proceedings had been slightly too long. Making an overall assessment, however, and taking the relative complexity of the initial investigation and the applicant’s conduct in the proceedings before the District Court into account, he concluded that the length of the proceedings had not been unreasonable within the meaning of Article 6 of the Convention. Finding that the length did not constitute an omission within the meaning of chapter 3, section 2 of the Tort Liability Act, he accordingly held that the Swedish State had not incurred any tort liability towards the applicant.
The applicant complained under Article 6 § 1 of the Convention about the length of the criminal proceedings.
The applicant complained that the criminal proceedings had been unreasonably lengthy. He relied on Article 6 § 1 of the Convention which, in relevant parts, provides the following:
“In the determination of ... any criminal charge against him, everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal...”
The respondent Government submitted, firstly, that the complaint should be declared inadmissible on the ground that the applicant could not claim to be a victim of a violation of the Convention within the meaning of Article 34. They asserted that the applicant had been afforded adequate redress for the alleged violation, as the District Court had expressly stated that the proceedings against him had exceeded a reasonable time and had found – with reference, inter alia, to the very long period of time that had passed since the offences had been committed – that neither of the two offences in question was of an aggravated nature and that they, as a consequence, were statute-barred under the relevant provisions of the Penal Code and the Tax Offences Act.
In the alternative, the Government claimed that the complaint was manifestly ill-founded, as the duration of the proceedings had not exceeded a reasonable time. In this respect, they agreed in substance with the conclusions drawn by the Chancellor of Justice as to the period to be taken into account and its reasonableness.
The applicant submitted that the fact that he had been the subject of a prosecution for such a long time that the offences had become statute-barred could not mean that he had lost the status of victim. He had suffered throughout the proceedings due to the uncertainty of the outcome. While the District Court had acknowledged that the proceedings had involved an unacceptable delay, the court had not afforded him any redress but had only concluded that he was innocent of the aggravated offences and that the offences of the normal degree were statute-barred.
The applicant agreed with the District Court that the relevant period started on 14 June 1993. In the alternative, he submitted that 8 April 1994, when the State’s application for personal payment liability was lodged, should be considered as the starting point. In any event, even if the Court should find that the relevant proceedings started on the date established by the Chancellor of Justice, i.e. 8 May 1996, the applicant claimed that their length had been unreasonable. He submitted, inter alia, that the case had not been complicated, that no reasons had been given for the delays during the preliminary investigation and that his own actions had been necessary for his defence and in order to ensure a fair trial.
The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. As to the Government’s objection concerning the applicant’s victim status, the Court finds that this question should be joined to the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established.
For these reasons, the Court unanimously
Joins to the merits the question whether the applicant can claim to be a victim of a violation of Article 6 § 1 of the Convention;
Declares admissible, without prejudging the merits, the applicant’s complaint concerning the length of the proceedings.
S. Dollé J.-P.
VALIN v. SWEDEN DECISION
VALIN v. SWEDEN DECISION